KITS: Sustained High-Growth Vision with Strategic ‘Land-Grab’ in High-Margin Glasses Supports Buy Rating

Gianluca Tucci, an analyst from Haywood, reiterated the Buy rating on Kits Eyecare. The associated price target is C$20.00.

Gianluca Tucci has given his Buy rating due to a combination of factors that underscore KITS’s strong growth profile and strategic positioning. The company delivered roughly 20% year-over-year revenue growth in Q4 and 27% for the full year, modestly exceeding sales expectations and reinforcing its emergence as a meaningful player in the North American optical market. A key highlight is the rapidly expanding glasses segment, where revenue increased by about one-third and unit volumes grew even faster, indicating successful market share gains in a higher-margin product category. Although aggressive pricing and promotions likely weighed on short-term margins, Tucci interprets this as a deliberate “land-grab” strategy to build a larger, more profitable customer base over time.

At the same time, KITS added approximately 30% more new customers during the year, supporting the view that its marketing spend is efficiently pulling consumers away from traditional brick‑and‑mortar competitors. The reported adjusted EBITDA margin of 4–5% came in slightly below consensus, but Tucci attributes this mainly to elevated customer acquisition costs and promotional activity tied to glasses growth, rather than structural profitability issues. He characterizes this incremental spending as value-accretive, focused on enhancing customer lifetime value rather than maximizing a single quarter’s earnings. With revenue outperformance, robust expansion in a high-margin category, and reinvestment that supports long-term scale and profitability, Tucci concludes the growth story remains intact and justifies maintaining a Buy recommendation on KITS.

In another report released on January 5, Cormark Securities also maintained a Buy rating on the stock with a C$21.50 price target.

Based on the recent corporate insider activity of 31 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of KITS in relation to earlier this year.